NTUC Income shares

[Jacmar]

But they have book value of $4.26B, 100M commons shares, and 76M permanent shares. So shouldn't book value per share be 4260/(100+76) = ~$24 per share?

Yes, it's not easy to read insurance AR.  The 76m(actually it's 78m) is part of the 100m(actually it's 108m) shares. total shares is 108.86m.

[Corgitator]

Got it, thanks for the clarification!

[weijian]

Jacmar,
Welcome back to VB. Really hope that old time VBs like you could post more frequently.

- Buying it "many many years ago" for your kids, is just like buying a stock and then throwing away the cert, only to see it resurface again after a long time. It is really the kind of attitude that OPMI should adopt but unfortunately, the system we are currently in (we are just 1-2 login/clicks away to check share prices or trade), heavily discourages this.

- 70% of NTUC income belongs to NTUC enterprise, the holding company of "its group of social enterprises". Well, I googled "social enterprises" and it told me that such enterprises are supposed to be profitable and then use the profits to create positive changes to society. If the BV has increased from $10+ (your estimate) to $39 (AR20), then there is surely a lot of retained earnings in the business!

- There are definitely much better cash cows that Spore Inc should consider to go public. It will do good for them to go international as well. Mapletree, Changi Airport Group and Surbana Jurong are a few...

[opmi]

NTUC Co-ops (namely Comfort, Fairprice and Income) were money-faced/profit-oriented during early 2000s. I think there were a shift back to social enterprises roots (bottom/triple bottom lines) in past >5 years. Also provided a counterbalance to the competitive pressure in daily essentials.

[Jacmar]

For those who missed the informational webinar last Friday, here is a short snapshot of what's of interest:

1. They will give every member a 1 time free TPD insurance coverage worth $52,000 for 3 yrs effective from corporatisation.

2. They will "look into" to help shareholders to facilitate for them to buy/sell their privately held shares base on willing seller/willing buyer basis. Income will not be involved in the transactions. So we could well see Income shares being traded pretty soon off the exchange ie later 2022. Need to wait and see how it's going to work. Anyone with experience in share dealing of those delisted co's pls share your expertise and experience.

Personally I don't mine picking up some if it's at a good price and wait for the eventual IPO. They did not commit to an IPO but I think they need it to raise capital efficiently. (See below about capital raising) I expect there will be a number of sellers as many of those members are quite old (70's and 80's) and want to cash out. So what you think is a good price to buy into? To me $20/share would be attractive as it would be 50% discount(bcos it's illiquid) to BV and at 3% div (cut down from usual 6%) and with potential to grow. Treat it as a convertible bond.

3. They said there won't be any share dilution in their capital raising. As they need more capital for their expansion and to meet MAS capital requirements, only can come from (Placement will be out): Rights issue , Borrowings (bond issue) .
Rights issue will not be receptive given that it is private co.

Some members wanted an ex-gratia payment due to prior yrs when our share was diluted by institutional members. I don't hold too much hope on this. Anything extra would be a bonus.

[money]

For those who missed the informational webinar last Friday, here is a short snapshot of what's of interest:

1. They will give every member a 1 time free TPD insurance coverage worth $52,000 for 3 yrs effective from corporatisation.

2. They will "look into" to help shareholders to facilitate for them to buy/sell their privately held shares base on willing seller/willing buyer basis. Income will not be involved in the transactions. So we could well see Income shares being traded pretty soon off the exchange ie later 2022. Need to wait and see how it's going to work. Anyone with experience in share dealing of those delisted co's pls share your expertise and experience.

Personally I don't mine picking up some if it's at a good price and wait for the eventual IPO. They did not commit to an IPO but I think they need it to raise capital efficiently. (See below about capital raising) I expect there will be a number of sellers as many of those members are quite old (70's and 80's) and want to cash out. So what you think is a good price to buy into? To me $20/share would be attractive as it would be 50% discount(bcos it's illiquid) to BV and at 3% div (cut down from usual 6%) and with potential to grow. Treat it as a convertible bond.

3. They said there won't be any share dilution in their capital raising. As they need more capital for their expansion and to meet MAS capital requirements, only can come from (Placement will be out): Rights issue , Borrowings (bond issue) .
Rights issue will not be receptive given that it is private co.

Some members wanted an ex-gratia payment due to prior yrs when our share was diluted by institutional members. I don't hold too much hope on this. Anything extra would be a bonus.

Happy to find a discussion forum on the corporatisation of Income.

Sad to say that instead of jumping with joy for a potential windfall, I am actually worried due to these reasons:

a) most shareholders are older/retirees folks holding small/odd number of shares. The legal process/costs/finding ready buyers/procedures is still very questionable now. From the recent sharing session, it's quite clear that Income is not very enthusiastic to be involved in private buying/selling of shares (they cite legal reason and all that). I doubt any clear procedures will be forthcoming from them in this regard. So how are old uncles/aunties able to quickly monetise their shares in emergency needs? And with many sellers want to cash out (old already) and few buyers (many cheaper, better potential stocks at sgx, with clear procedures), I am really fearful for shareholders who wants to cash out to even be able to do it, much less earn big money from it.

b) on potential ipo, i really don't think it's going to happen anytime soon because:
(1) social enterprise is the main reason for it's existence. It's over 70%? funded/owned by ntuc enterprise. I find this core existence to be at odds with a full fledged Ltd commercial company where shareholders expect focus on profits. Who wants to go buy ipo of company that focus on do good?
(2) based of information from the briefing, one of the problem income face with the co-operative mode is that these capital (30%?)hold by members cannot be counted towards some rules set by the MAS to provide buffer on solvency issue. Because they are redeemable anytime by members at $10 each. With corporatisation, this issue is resolved and suddenly a big sum of capital is 'counted'.
I feel this is the true objective of this exercise.

So as a small/old shareholder, I'm really concerned, and I'm at a loss of what to do. Maybe i should play safe just take back my principal now having enjoyed all the dividends or go into the unknown territory...already so old, how to wait, how to be able to deal with the complexity of private buy/sell?

Btw, feel free to correct me if I'm wrong. I'm not a financial expert. It's just my personal feelings and opinions to the best of my knowledge from checking all over the place. 
 I mean no harm and not trying to spread falsehood to anybody or company. Just an old man Panicking! Thank you.

how many shares do you own now? Say you own 10 shares, $20 each share, i dont think it is significant enough to affect your retirement. So dont worry too much about it

[Jacmar]

Hi Jackie, firstly there are not many shareholders of Income shares to begin and even those who hold them are senior in yrs and not many in this forum or any forum as they are not that internet savy.

I would encourage you to do the followings if you are concern about this corp exercise:

1. write to them directly to express your concern. They said they are committed to reply all queries.
What you can do is request the board to insert a share buyback mandate in the next AGM. The mandate would require the co to buy back shares from shareholders at $10 or BV whichever is the lower. This would essentially return to the status quo before corportisation.

2. attend the EGM scheduled on Feb 15th and raise your concerns again if you don't get a satisfactory to your written letter.

Quote
At the sgx there are many blue chip stock trading around $5 a piece (sia? good potential?. Would investors even look at this 'private' stock for $10? much less $40???

My answer is Yes. I would be interested. This is akin to investing in private equity or pre-IPO investment. It's a whole set of alternative asset class. I think Temasek would be very interested in coming in if given the opportunity. Don't forget this NTUC we are talking about and not some private business venture. There is a moral hazard involved and govt cannot let it fail.

[Jacmar]

Anybody has access to AltaX(only available to HNWI)? The recent Income shares traded through POEMs closed last mth. I wonder what was was the traded price.

[weijian]

Minority investors (who were not accredited investors) finally have a chance to exit now

Income Insurance receives Pre-Conditional Voluntary Cash General Offer from Allianz Europe B.V.

NTUC Enterprise currently holds approximately 72.8% of the Shares in Income Insurance, with the remaining held by minority shareholders. As stated in the Pre-Conditional Offer Announcement, NTUC Enterprise and the Offeror have entered into a deed of irrevocable undertaking (the “Irrevocable Undertaking”) under which, among other things, subject to the fulfilment of the Pre-Condition and a Voluntary Cash General Offer (“Offer”) being formally made by the Offeror, in the event that the acceptances by the shareholders of Income Insurance immediately prior to the close of the Offer (excluding NTUC Enterprise’s acceptance of the Offer pursuant to the Irrevocable Undertaking) is less than 54,667,790 Shares, to duly accept the Offer in respect of such number of Shares which would result in the Offeror acquiring at least 51% of the Shares at the closing date of the Offer.

https://links.sgx.com/FileOpen/4.%20NTUC...eID=810055

[xierwang]

Minority investors (who were not accredited investors) finally have a chance to exit now

Income Insurance receives Pre-Conditional Voluntary Cash General Offer from Allianz Europe B.V.

NTUC Enterprise currently holds approximately 72.8% of the Shares in Income Insurance, with the remaining held by minority shareholders. As stated in the Pre-Conditional Offer Announcement, NTUC Enterprise and the Offeror have entered into a deed of irrevocable undertaking (the “Irrevocable Undertaking”) under which, among other things, subject to the fulfilment of the Pre-Condition and a Voluntary Cash General Offer (“Offer”) being formally made by the Offeror, in the event that the acceptances by the shareholders of Income Insurance immediately prior to the close of the Offer (excluding NTUC Enterprise’s acceptance of the Offer pursuant to the Irrevocable Undertaking) is less than 54,667,790 Shares, to duly accept the Offer in respect of such number of Shares which would result in the Offeror acquiring at least 51% of the Shares at the closing date of the Offer.

https://links.sgx.com/FileOpen/4.%20NTUC...eID=810055

Is S$40.58 per share offer fair?